Three forecasts of the gross domestic product (GDP) for the current fiscal show contraction to be much deeper than their initial assessments — because of the untramelled spread of the virus and intermittent lockdowns which have devastated all sectors barring agriculture.

The projections of Fitch Ratings, India Ratings and Research and American brokerage Goldman Sachs estimated deeper contractions even as the economy took a despairing 23.9 per cent plunge in the first quarter.

Fitch Ratings has forecast 10.5 per cent contraction against its earlier forecast of 5 per cent contraction made in June. Fitch has projected global GDP to contract 4.4 per cent in the current year but revised upwards China’s growth estimate to 2.7 per cent for 2020.

Goldman Sachs has sharply cut its 2020-21 GDP forecast to a contraction of 14.8 per cent, saying the Indian economy is the worst-hit among the major ones. It had earlier estimated an 11.8 per cent contraction.

Domestic rating agency India Ratings revised its forecast to 11.8 per cent contraction from 5.3 per cent contraction made earlier. The agency, however, expects GDP to rebound and grow at 9.9 per cent year-on-year in 2021-22 mainly due to the weak base of 2020-21. According to the agency, the retail and wholesale inflation in the country is expected to come in at 5.1 per cent and negative 1.7 per cent, respectively, in 2020-21.

Fitch said multiple challenges are holding back growth recovery, both in the short and medium term. “New cases of the coronavirus continue to increase, forcing some states and Union territories to re-tighten restrictions... The continued spread of the virus and the imposition of sporadic shutdowns across the country depress sentiment and disrupt economic activity,” Fitch said.

It further noted that the severe fall in activity has also damaged household and corporate incomes and balance sheets, amid limited fiscal support.

According to Goldman Sachs, activity across all sectors barring agriculture contracted because of the lockdowns. The nearly two-month-long lockdowns chilled economy activity but was unable to contain the number of infections, which stands at 40 lakh.